Howard inc. had prepaid rent of $75,000 and $80,000 at the end of 2017 and 2018, respectively. during 2018, howard recorded $240,000 in rent expense in its income statement.

cash outflows for rent in 2018 were: (a) $250,000.(b) $240,000.(c) $245,000.(d) $235,000.

Rent recorded in income statement  240,000

Rent prepaid in 2018                           80,000

                                                             320,000

Less: Rent prepaid in 2017                  75,000

Cashflow for rent                                 245,000    

The correct answer is  C

Explanation:

In this case, we will add the rent prepaid in 2018 to the amount reported in income statement and deduct rent prepaid in 2017. This gives the cashflow for rent.